Irish national airline Aer Lingus reported a return to profit for 2010 despite a drop in passenger numbers. However, the airline warned that a hike in fuel prices could mean that this year’s earnings will be down.
Aer Lingus reported a net profit of $64 million for the year compared to a loss of $179.5 million in 2009.
Christoph Mueller, Aer Lingus' chief executive said, "We expect significant challenges in 2011, with trading for the year likely to be impacted by fuel price inflation and increased airport charges in combination with difficult conditions in our home market."
Last year’s results showed that revenue rose by one percent even though the number of passengers dropped by 10 percent. However, despite the drop in the number of passengers Aer Lingus experienced an increase in the average yield per passenger.
Although the company reported an improvement in 2010, investors in the company focused on the more downbeat assessment for the year ahead. Therefore, Aer Lingus shares dropped 1.6 percent to $1.23.
Mueller said Aer Lingus does not expect increases in the average passenger spend or cost savings. Due to these factors he believes that profit in 2011 will be down if current fuel prices persist.
The airline also expects a weak trading result due to the fact that it hired extra aircraft to continue operations during the suspension of cabin crew due to a working disagreement with the company.